Month: April 2014

Now’s a great time to get a mortgage thanks to historically low rates. As you can see from the historical data below, today’s average mortgage rates are lower than they were in the 50s! Although rate isn’t the only important aspect of a mortgage, it’s interesting to see how rates have fluctuated over the past few decades. In the most recent 15 years banks were offering discounts of 1% to 1.3% off the rates below. If you know of anyone that is thinking of buying or refinancing your referral would be very much appreciated. www.darick.ca dbattaglia@dominionlending.ca 705 797 8811

any experts believed that the real estate market was cooling. But as the spring buying season begins, it’s clear that’s not true. Housing

Housing prices: What does $400,000 buy you?

According to the Canadian Real Estate Association, the national average price for a home in March was $401,419, an increase of six per cent in year-over-year comparisons.

While the market defies predictions, one thing’s for sure: The continued rise of Canadian home prices is putting a damper on the hopes and dreams of first-time buyers.

Sarah Wiseberg, who rents a condo in Toronto’s pricey downtown core, knows this only too well.

“I’ve been searching for almost a year, and I think it’s extremely discouraging for a first-time homebuyer, particularly if they are looking for something other than a 500-square-foot condo,” Wiseberg said.

Agata Pietrzak, a real estate broker for Remax Condos Plus in Toronto, says there are many buyers entering the housing market, but not enough supply to meet that demand.

“In terms of single-family homes, there is a lack of inventory, and that usually results in a bidding war,” Pietrzak said. “It is almost unimaginable to buy a house at list price now.”

In some instances, Pietrzak says she has seen first-time homebuyers with small families resort to condos, because prices for houses were way beyond their budget. The risk of bidding wars

In a recent report released by BMO Financial, the national average budget for first-time buyers has increased to $316,000, with Vancouver topping the list at $506,500. Toronto comes in at $408,300 and Calgary at $363,400.

Wiseberg, who says she is willing to spend between $500,000 and $600,000 for her first home, entered the housing market after abandoning the idea of spending hundreds of thousands on a condo. She couldn’t believe the competition in the housing market.

‘Every house that I’ve gone to easily goes $100,000 over the asking price’- Sarah Wiseberg, first-time buyer looking to purchase in Toronto

“Every house that I’ve gone to easily goes $100,000 over the asking price,” Wiseberg said. “I definitely do not want to enter a bidding war, because I don’t want to be cash-poor.”

The BMO Financial report found that 60 per cent of first-time buyers in Canada are delaying purchases, and 39 per cent of those cite high prices as the main reason.

But not all is doom and gloom. Several cities across the country have seen price drops, including Montreal, Winnipeg and Regina.

Broker and manager Daniel Wachniak from Royal LePage Dynamic in Winnipeg says the city’s housing market is fairly balanced, but specifies other factors are at play when it comes to pricing. He said the prolonged winter is one factor that explains the recent price decrease in Winnipeg.

“You have to look at our weather and the time of year,” Wachniak said. “The houses that probably sold [in late winter] were more open to negotiations than houses being listed right now.”

When it comes to bidding wars, Wachniak said he has seen them go as high as $80,000 over asking price.

“We had different spikes, ranging from $5,000 to $80,000, where a house in a certain area not usually seeing listings results in a bigger demand,” he said. ‘Getting squeezed’

Given lenders recent decision to cut its five-year fixed mortgage rate to 2.99 per cent, Pietrzak said it’s a good time to buy, especially for first-timers.

“I’m working with several first-time buyers right now and they are becoming more confident in the market and with the rates available,” she said.

“Many first-time homebuyers in Toronto are getting squeezed,” Mangaroo said. “A lot of the mortgage rules that have happened in the last couple years have made it harder to get a mortgage.”

In 2012, the federal government reduced the maximum insured amortization period for a mortgage to 25 years. It has also tightened other regulations, like putting a limit on the percentage of their gross household income a homebuyer can spend on home expenses in order to qualify for a mortgage.

These factors, along with a short supply of houses, especially in urban centres, is having a negative effect on buyers, says Mangaroo.

The disparity is evident in the numbers: The average budget for first-time buyers in Toronto stands at $408,300, but the average house price in Toronto is $546,597.

Buyers unhappy with the condo lifestyle are finding their options increasingly limited.

Preferring a house with space and character, Sarah Wiseberg has her eyes set on a home in one of Toronto’s older neighbourhoods. She found a couple of houses with potential, but they sold before she could even make an offer.

While prices may grow further out of reach, Wiseberg said she is reluctant to turn to her parents for financial assistance. She’s determined to do it on her own.

“I think whatever is meant to be will be,” she said. “If I find a place by June, amazing. If I don’t, then I’m fine with renting for another year.”

There is lots of confusion as to the rights of landlords and tenants in Ontario when a home is put up for sale. Landlords are trying to bully tenants into leaving and tenants are refusing to permit potential buyers to see the home.

Here are the rules:

• Landlords can sell their home at any time;

• If the tenant has a lease, they cannot be evicted before the end of their lease term;

• Tenants must permit showings to potential buyers, as long as 24 hours’ advance written notice is given and the showing takes place between 8 am to 8 pm. Tenants need to make sure that any pets that they own are kept securely during showings. Tenants are permitted to be at the home during showings, although it is not mandatory.• If a tenant’s lease has ended, they automatically become a monthly tenant and must still be given 60 days’ notice to vacate, provided that a buyer has already unconditionally agreed to buy the home.

Some tenants believe that if they still have a lease for several months, the landlord cannot show the home to potential buyers. Wrong. If the buyers do purchase the home, they must still respect the terms of the lease when they take over as landlord. At the end of the lease term, the buyers, now the owner, can provide a 60 days’ eviction notice based on the fact that they need the home for themselves or their family.

If a tenant refuses to permit showings after proper notice has been given, the landlord can start eviction proceedings as this is a breach of conduct by the tenant. The landlord could also potentially claim damages from the tenant if the tenant’s actions prevent the landlord from selling the home in a timely manner.

Landlords cannot trick tenants into leaving either, pretending to move in so that the tenant vacates and then immediately fixing the place up and selling it. The tenant can sue the landlord for damages if this occurs. This can include all the tenant’s moving costs and higher rent that may have been paid elsewhere. The Board may also add additional fines for breaking the law.

If you are planning to sell your home, my advice is to approach your tenant first to work out a plan for showings that accommodates everyone, so that the tenant can properly plan to protect their valuables and secure any pets and the landlord can permit potential buyers to see the home on a timely basis. As an example, agree to only permit showings from 4-6 pm each day.

Some landlords assist their tenant first in finding another place to live, even before putting the home up for sale. This is also an excellent solution, in my opinion. The tenant gets to find another place, without the stress of an eviction proceeding, and the landlord then gets to later fix up their home and make it more presentable to a wider range of potential buyers.

When landlords and tenants understand the rules and co-operate when a home is being sold, everyone wins.

You just discovered a charge on your card that you are certain you did not—nor ever would—authorize. You may well be—or about to be—the victim of fraud. If you suspect this is the case, you would be wise to place a fraud alert on your credit report. Placing a fraud alert means that your credit report file will be flagged so that before issuing new credit, creditors are required to contact you or otherwise verify your identity. There is never a fee on placing a fraud alert. We’ll show you how to do it.

Method 1 of 3: Online

Go to one of the three CRCs (Credit Reporting Companies). These are Experian, Equifax, or TransUnion. Each of them will let you put a free 90-day fraud alert on your account.

Place the alert with any one of the CRSs, and it will notify the other two to place an alert as well.

Determine what type of fraud alert you need:

Initial Fraud Alert. This is if you are concerned about the possibility of becoming a victim of fraud or identity theft. It generally is good for 90 days. This requires proof of identity and a copy of your identity theft report. This also entitles you to a free credit report from all three CRCs.

Extended Fraud Alert. This is what you file if you are a victim of fraud or identity theft. This will stay on your credit report for seven years.

You will need a copy of your identity theft report.

This entitles you to a two free credit reports from all three CRCs in the first 12 months, then one a year after that.

Active Duty Military Alert. This is if you are in the military and want to minimize your risk of fraud or identity theft while you are deployed. It will remain on your report for one year.

Place a fraud alert. Visit one of the CRCs, and locate the Fraud Alert link on the home page.

Fill out the form. You will need to fill in your name, address (and in some cases, previous address), Social Insurance information, and other information relevant to your particular alert type.

Click Submit when finished. Your notice will go onto your report, and the other CRCs will also be notified.

Method 2 of 3: Telephone

Call a CRC. Their automated phone systems will guide you to the correct customer service representative who can help you with your report. Be prepared to give them your personal information including addresses, social security number, and contact info. Here are the numbers:

TransUnion: 1-877-713-3393

Equifax: 1-800-465-7166

By notifying one of the bureaus that you are at risk of being a victim of identity theft they should automatically notify the other two.

The alert will remain in effect for 90 days, though you can call back after the 90 days and place another alert on your account.

Get an extended fraud alert. If you have evidence of actual or attempted identity theft and have filed a police report, you can extend the alert for 7 years.

This is what I did.

Sign up with a CRC. Each of the CRCs have their own form of credit monitoring products that offer varying services to protect you, financially.